S&P-500 Declines as decision on cliff postponed till 30th Dec’12

U.S. stock marked in red representing losses by the end of yesterday’s trading as the session  of the House of Representatives was adjourned to resume on December 30th gearing hopes for a budget deal soon.

The S&P 500 (SPX) dropped 0.1% down to 1,418.10 last days after an early morning retreat as much as 1.3%. The Consumer discretionary stocks (SPXL1) overturned after a 1.3% decline. All in all the SPX declined 0.8% this week as budget negotiations were delayed beyond the Christmas holiday. It has rallied 13% this year.

Dow Jones Industrial Average lost 18.28 points, to 13,096.31. The total volume was 5.2 billion shares on U.S. exchanges, i.e. 15% below three month average, per Bloomberg data.

Stocks stumbled in response to Harry Reid’s statement that Republicans appear unwilling to cooperate for a resolution before January. Eric Cantor’s twitter post saying the house adjourned till the evening of Dec. 30.

The Secretary of the Treasury Timothy Geithner warned his department will have to resort to “extraordinary measures” to fill the $200 billion deficit gap if the Decemeber 31st deadline passes without a deal.

Expedia Inc. (NASDAQ:EXPE)’s 4.1% climb was the highest among the components of the index. J. C. Penny 5.9% decline was the largest on the US equity securities index. Among financial market players JPMorgan Chase & Co. (NYSE:JPM) and the Bank of America Corp., (NYSE:BAC) plunged down by 0.6%. Marvell Technology Group Ltd. (NASDAQ: MRVL) fell 3.5 % after JMP Securities LLC’s downgrade.

In an interview Jim Russell, chief equity strategist at U.S. Bank Wealth Management said the perceived negotiations standstill is checking the market sentiment. The Conference Board’s index of sentiment fell to 65.1 from an earlier reading of 71.5. Bloomberg  anticipated it to fall to 70. Haverford Trust Co.’s CIO , Hank Smith believes “some bridge will be built at the last minute,”and the market has intelligently identified the “political theatre”.

The housing sector revenues touched a two year’s high as the job market bounces back. The number of Americans filing for unemployment insurance was far below the expected range according to the public records.

The shares of Expedia Inc. (NASDAQ:EXPE) were up 4.09% to close at $60.30. Shares of Bank of America Corp. (NYSE:BAC) were down 0.61% to close at $11.47. Shares of JPMorgan Chase & Co. (NYSE:JPM) were down 7.25% to close at $43.63. Shares of Marvell Technology Group Ltd. (NASDAQ:MRVL) were down 3.51% to close at $7.14.

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Published by Viraj Shah

Viraj Shah has done M.Com (Finance) and currently pursuing CFP. He is a technical analyst who tracks US markets along with other global markets like India very closely. He is very passionate about stocks and believes that money can always be made in market.

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